Shares of flea market app operator Mercari surged on their debut on the Tokyo Stock Exchange's Mothers market on Tuesday.

Mercari's stock closed up 76.66 percent at 5,300 yen ($48.31) per share on its first day of trade. Shares had risen as much as 100 percent earlier in the session.

The company had priced its initial public offering at 3,000 yen ($27.34) per share and raised around $1.2 billion, which Reuters said made it the largest IPO in Japan in 2018.

Mercari says its popular mobile app — which allows users to buy and sell secondhand goods from its online marketplace — has been downloaded more than 100 million times in total. More than 100,000 new items are listed on its platform every day, the company said.

It is also currently expanding its presence globally, with more than 30 million existing downloads coming from the U.S.

The enthusiasm for the marketplace company was justified, Jesper Koll, head of Japan for fund manager WisdomTree, told CNBC's "Capital Connection." Mercari "is exactly what investors want to see. They want to see a new Japan, aggressive entrepreneurs, not just focusing on the domestic market, but prepared to take on the world," he added.

Still, Koll acknowledged that competition will likely become tougher for the company, with players like Rakuten also contesting the space.

The company's soaring debut could also set the tone for other Japanese entrepreneurs to look beyond Japan's large domestic market.

"This is really going to be encouraging for the entire Japanese start-up ecosystem: the fact that we can have unicorns coming from Japan as well," said Gen Isayama, chief executive officer of World Innovation Lab, an early investor in Mercari.

Mercari had been one of two start-ups with unicorn status — referring to companies that have valuations of at least $1 billion — in Japan, Reuters said, citing CB Insights.

Gains in Mercari came despite declines in the overall Japanese market on Tuesday amid fears of a trade war between the U.S. and China. The benchmark Nikkei 225 closed down 1.77 percent and the broader Topix fell 1.55 percent.